China steps up rules on asset management for banks
Institutions handling securities and futures should adopt a diversified portfolio and are subject to the 'double 20%' ratio
The China Banking and Insurance Regulatory Commission has released much-anticipated draft rules on commercial banks’ wealth management products as it moves to improve the investment operation system, Yicai.com reported.
According to the new regulations, institutions handling securities and futures should adopt a diversified investment portfolio, and are subject to the “double 20%” ratio restriction.
That is, a collective asset management plan is not allowed to park most of the funds in one wealth management product (WMP). The funds invested in one WMP shall not exceed 20% of the net asset value of the plan.
Meanwhile, all asset management plans managed by one financial institution are not allowed to invest more than 20% of the assets in one WMP.
Also, non-standard investment in bank WMP’s is not allowed to exceed 35% of the net assets of the WMPs or 4% of total bank assets.